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Question
What is meant by ‘Investment Decision’?
Solution
The process of deciding where to distribute capital in order to earn returns is referred to as an investment choice. Investment decisions in business might involve the purchase of new assets, the expansion of activities, or the purchase of securities such as stocks and bonds.
- Long-term investing decisions entail allocating cash over the course of several years or more. Long-term investment decisions can involve purchasing new equipment or machinery, increasing a company's physical base, or investing in research and development.
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Short-term investing decisions entail allocating funds for a period of time of one year or less. While short-term investment decisions typically include less capital and have less of an impact on a company's overall strategy, they still may have a significant impact on its liquidity and cash flow.
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